Monday, October 18, 2010Last Update: 10:10 AM PT

Snafus and an Alarming Statement at BP Oil Spill Status Conference

By SABRINA CANFIELD

NEW ORLEANS (CN) - A BP attorney in Federal Court on Friday did not deny allegations that BP may take shelter under the $75 million liability cap provided by the Oil Pollution Act. That prompted an attorney for plaintiffs to say, "We're shocked over here to hear the defendants now bring up this $75 million cap. We were under the impression [the cap] was waived." Plaintiffs' attorney Steven Herman and BP attorney Don Haycraft sparred before U.S. District Judge Carl J. Barbier during a Friday morning status conference on the Deepwater Horizon oil spill catastrophe. Judge Barbier appeared to agree with Herman, saying the public had the impression that BP executives have said repeatedly that the company will pay whatever is necessary to clean up its mess. "BP said it would pay whatever [is] necessary," Barbier said. But in response, BP attorney Don Haycraft said, "I know that BP has paid lots and lots and lots" of money already. Haycraft said the issue of liability is before Congress and he could not discuss it without guidance from BP. "I haven't discussed that with BP in this particular context," Haycraft told the court. But Haycraft agreed with Herman's assertion that BP has promised to pay all costs necessary. "I have said for sure, 'BP will pay all legitimate claims,'" Haycraft said. "All legitimate claims up to $75 million?" Herman asked. "I am not prepared to answer that question in this context," Haycraft said. The Oil Pollution Act of 1990 caps damages from oil spills at $75 million. It was enacted after the March 24, 1989 Exxon Valdez oil spill off the coast of Alaska, to strengthen the Environmental Pollution Agency's response to oil spills. The Act also requires oil companies to have a plan for preventing spills and for cleaning them up. As early as May 5 this year, BP's then-CEO Tony Hayward said in a press conference that BP would not hide behind the $75 million cap and that all legitimate claims "will be honored." BP already has paid almost $1.4 billion in oil spill claims for the Deepwater Horizon disaster, according to data provided by the Gulf Coast Claims Facility, under Kenneth Feinberg's direction. Haycraft said 61,000 claims are still pending because of missing information. Feinberg is the federally appointed administrator of the BP Deepwater Horizon Disaster Victim Compensation Fund. He fulfilled a similar role after the Sept. 11, 2001, World Trade Centers disaster. Plaintiffs' counsel said that BP previously acknowledged Feinberg as one of its own agents, but now attorneys for the company have become vague about Feinberg's affiliation with BP. Herman told the court that he and co-plaintiff liaison counsel Jim Roy were "disturbed by BP counsels' statement that Mr. Feinberg is not BP's agent," despite its previous claims. Herman said that if Feinberg is not BP's agent, plaintiffs' counsel want to make sure he is at least BP's agent under the Oil Pollution Act. Judge Barbier concluded that case law determined that BP's wavering on the issue of Feinberg's affiliation was "an omission: Feinberg is an agent of BP." The judge denied plaintiffs' motion for discovery on the Gulf Coast Claims Facility, to ensure that claims information is not destroyed. "I am pretty confident that Mr. Feinberg is not going to be out there destroying those records," Judge Barbier said. Hundreds of lawsuits have been brought by fishermen, hotel owners, business owners and injured workers after the April 20 explosion of the Deepwater Horizon rig, which set off the worst oil spill in U.S. history. A federal judicial panel sent most of the resulting lawsuits to New Orleans Federal Court to be presided over by Barbier, a Clinton appointee. A committee to orchestrate the defendants in litigation has not yet been assigned. Last week Barbier announced his selections for the 15-member plaintiff steering committee. The plaintiffs' four-member executive panel is made up of Louisiana attorneys Jim Roy and Steve Herman, who had already been acting as the plaintiff's co-liaison counsel, and the more recently selected attorneys Scott Summy of Dallas and Brian Barr of Pensacola, Fla. Among the 15 members chosen for the steering committee is Elizabeth Cabraser, a California attorney who led litigation against Exxon after the Exxon-Valdez Oil Spill. The committee includes Mike Espy, the Secretary of Agriculture under President Bill Clinton. More than 100 attorneys applied for the steering committee, and several high-profile applicants were left out. David Boies, attorney for Al Gore before the U.S. Supreme Court during the disputed 2000 presidential election, was not selected, nor were some heavyweight attorneys who have had success litigating against BP, such as Texas attorney Tony Buzbee. A seat on the committee gives an attorney the ability to help shape the case, as well as a larger claim to any settlement reached. Attorneys left off the committee face the danger of being squeezed out of the litigation, an issue Barbier addressed first during Friday's hearing. "To those not selected, there will be many roles for other plaintiff attorneys to play," the judge said. The first trial date has been moved up since the previous hearing, a month ago, and is now slated for Feb. 27, 2012. A teleconference call line was scheduled to be open for parties who wanted to join the hearing by phone. A glitch in the system resulted in confusion for callers and much humor for those in the crowded courtroom. The call line never made connection. The next status conference has been set for 9 a.m. on Nov. 19.